Struggling homeware and fashion retailer BHS is planning a drastic revamp with the closure of a number of its stores and the restructuring of its dwindling pension scheme, the Sunday Telegraph revealed. KPMG has been assigned to suggest how the retailer can reduce its 170 store portfolio.
Following Retail Acquisitions’ purchase of BHS for £1 from Sir Phillip Green last year, the retailer lost a total of £85m before tax. Since then, the new owners and management have attempted to repair the chain’s depreciating finances. A recent £65m loan from Grovepoint Capital was raised in addition to the leasing of BHS’ flagship Oxford Street store.
It is known that BHS plans to close at least 30 stores, though the total is likely to exceed this number. Retail Acquisitions came up with a list of more than 50 sites to be reviewed after its appointment in March last year.
BHS’s pension plan is also suffering; The trustees’ latest prediction saw a shortfall of £207m, which is likely to grow by the next valuation.
Shortly after the company was sold last year, Chairman of the Pension Trustees Chris Martin discussed both the company pension scheme and senior management scheme as having “large shortfalls between their assets and the amount they need to pay current and future benefits to all members”.
“The trustees will be discussing, with the new owners of BHS, the level of contributions required to make good these shortfalls and over what period of time those contributions need to be paid... these discussions may take many months to conclude,” Martin added.
“BHS has stated publicly many times since the acquisition that it would like to take steps to address a number of unprofitable stores. This may involve discussions with some landlords, and KPMG will help us in this process” said a Spokesman for Retail Acquisitions.
“We have made no secret of the fact that like other companies we have a pension deficit that we would like to address also and we continue to take advice in relation to this complex area.
Our turnaround plan is still in its first year. Although we still have a long way to go, we are entirely confident that we will regain our place as an iconic British high street brand.”